BUS operators will cut services across South Wales because of rising fuel costs and an extra “tax on passengers” imposed by the Welsh Assembly Government.

BUS operators will cut services across South Wales because of rising fuel costs and an extra “tax on passengers” imposed by the Welsh Assembly Government.

In August alone, more than 10 services have been officially listed for withdrawal, including the X55 between Swansea and Aberdare.

Councils are facing cost increases of up to 68% to maintain bus services, as operators abandon contracts and new ones have to be agreed with other companies.

The cuts in passenger services come as the Assembly Government has announced extra bus funding for councils.

But this has not increased in line with inflation, which is higher within the bus industry.

And bus operators last night accused the Assembly Government of levelling a tax on bus travel by refusing to refund last year’s 2p-a-litre rise in fuel duty, which has been granted to English bus companies.

John Pockett, director of the Confederation of Passenger Transport Wales, said the Assembly Government’s decision not to reimburse the extra 2p duty, through bus services operators’ grant, was significant.

“Bus operators are contacting me and saying it’s having a considerable effect,” he said. “We see it as a tax on bus passengers.

“Bus operators want to provide a service. They’re not in the business of withdrawing services. It’s unfortunate, and it’s a consequence that wasn’t foreseen when the Government in Cardiff decided not to introduce the 2p rebate.”

The Assembly Government announced £30m in subsidies to bus operators for 2008-09, including an increase to £10.8m in the local transport services grant, which is given to councils to support buses and community transport.

The LTSG grant for 2007-08 totalled £10.4m. This year’s increase of 3.8% is less than general inflation, according to the Retail Prices Index.

One council officer, who did not wish to be named, said: “In real terms, it’s a cut. It’s going to make things difficult for many of the authorities.

“The costs for bus operators have gone up so much over the last 12 months, fuel being the obvious one. We’ve had some operators looking to cut back commercial [unsubsidised] services because of the price of fuel.”

In April his council had agreed to raise its payments to all bus contractors by more than 6%, to reflect the 2p rise in duty and other increases in the previous 12 months.

Most of the services listed for withdrawal next month are operated by Bebb Travel and Pullman Coaches, part of Veolia Transport Cymru.

A spokeswoman said councils were seeking replacement contracts for most of the services Veolia was withdrawing next month.

Simon Wilkins of EST Bus said the E2 service between Cowbridge and Moulton was linked to a schools contract which the company no longer operated.

“We’ve had a huge increase in fuel costs and unfortunately we have to pass that on to the customer by increasing fares,” he said.

The Vale of Glamorgan Council said it had managed to maintain the bus service between Barry, Llandough Hospital and Cardiff after EST Bus gave up its contract. But a spokesman said: “Unfortunately there’s been a significant increase in tender price, over the current provision.”

The new contract has been awarded to lowest-cost bidder First Cymru, which needed £40,000 more for the service than EST was paid – an increase of 68% – the spokesman added.

An Assembly Government spokesman said that while fuel prices and taxes were not the responsibility of the Welsh Assembly Government, “we fully understand and are concerned about the impact that the increase in fuel costs is having on transport services, the haulage industry and individual motorists in Wales. The Deputy First Minister has met with representatives from these sectors to discuss their concerns in detail, and has raised these concerns with the UK government.

“The Confederation of Passenger Transport, the WLGA and local authorities are working with us to review the way funding is provided to support bus services in Wales. This review is expected to be completed by the end of the year.

In the meantime, the Minister has announced a £30m package to support bus services across Wales, including a grant of £10.8m for local transport services, and a further £19.5m for the Bus Services Operators Grant and the Bus Revenue Grant."

WalesOnline is part of Media Wales, publisher of the Western Mail, South Wales Echo, Wales on Sunday and the seven Celtic weekly titles, offering you unique access to our audience across Wales online and in print.